BlackBerry Stock Slips 16% after rejection from the $12 barrier

Summary:

After an impressive run, BlackBerry stock (NYSE: BB) met resistance at $12.00 and has since retreated to crucial support at $11.00.

After an impressive run, BlackBerry stock (NYSE: BB) met resistance at $12.00 and has since retreated to crucial support at $11.00. Blackberry has outperformed the broader market in October. Even after the recent reversal, the cybersecurity company has improved by 13.5% this month.

Sentiment surrounding Blackberry had been somewhat mute recently than earlier this year, and the stock trading sideways in a broad channel between $9.00-$12.00. However, earlier this month, there were signs that BB was on the verge of another spectacular bull run similar to earlier in the year. Confidence surrounding BlackBerry has been growing in the last couple of weeks. Although the company’s Q2 trading update in September showed a 34% YoY decline in revenue, the was a silver lining. BlackBerry’s cybersecurity products and automotive software are gaining traction. As a result, the stock price surged 30% in the first two weeks of October, clearing major moving averages in the process. However, the bulls must overcome $12.00 to get the party started. Until that happens, the stock remains stuck in a range and vulnerable.

BB Price Analysis

The daily chart highlights the importance of the $12.00 threshold. The $12.00 mark has been a significant support and resistance level over the last ten months. If BlackBerry manages to close above $12.00, I would consider that extremely constructive. In that event, an extension to $15.00 looks easily achievable. However, for that to have a chance, BB must hold above the key moving averages.

The 100-day moving average at $11.01 and the 200 at $10.76 hold the key to BlackBerry prospects. As long as the stock remains above the 200 DMA on a closing basis, I expect bullish sentiment to force an upside breakout. On that basis, I hold a bullish view of the stock with a $15.00 price target. However, a close below $10.76 will invalidate this view and force me back onto the sidelines.